Nvidia And Trump’s Tariffs Compete For Stock Market Attention

Two major forces were expected to influence markets this week—chipmaker Nvidia’s earnings and the Federal Reserve’s preferred inflation measure, the personal consumption expenditures (PCE) index.

Nvidia once again exceeded Wall Street's expectations, benefiting from the ongoing artificial intelligence (AI) boom. I Photo: Nvidia

But a third, unexpected factor rattled traders on Wednesday: fresh comments from President Donald Trump about imposing tariffs on European imports, Barron’s Daily reporter Brian Swint wrote.

Markets trembled at the news, indicating that traders are taking Trump’s tariff threats seriously due to the potential for inflation and economic disruption.

However, stocks did not experience a major selloff, suggesting that investors remain skeptical about the severity of the proposed measures.

Meanwhile, Nvidia once again exceeded Wall Street expectations, benefiting from the ongoing artificial intelligence (AI) boom. However, traders reacted with relative indifference—accustomed to the company’s repeated blockbuster performances.

The strong earnings reaffirmed that AI remains a powerful force driving market growth.

Trump’s policies and AI developments are both critical in determining whether stocks are nearing their peak as the bull market enters its third year. AI is still a major driver of corporate earnings, particularly for suppliers like Nvidia.

However, companies betting on AI-driven productivity improvements still have much to prove—especially as China’s DeepSeek challenges conventional assumptions about AI costs.

The broader economic picture remains uncertain. While consumer confidence data this week looked weak, hard economic data has yet to confirm a slowdown.

The S&P 500 managed to break a four-day losing streak on Wednesday, and Friday’s PCE data will be the next major indicator to watch.